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CoverStory
Code of conduct for Canadian payments • Equal branding visibility is required
on all co-branded debit cards. Debit
In April 2010, Canada's Minister of Finance and credit card functions shall not both
introduced a voluntary Code of Conduct for the reside on the same payment card.
Credit and Debit Card Industry in Canada. The • Premium payment cards with higher
document's purpose is to promote fair business interchange fees must meet income and
practices and transparency connected with payment consent thresholds.
card costs and benefts borne by merchants and
consumers. Canadian legislators concurrently • Merchants who have not consented
enacted the Payment Card Networks Act, which to use new card brand products and
granted Canada's Minister of Finance authority services are not obligated to use them.
to further regulate market conduct if deemed
necessary. With trust so highly prized, it is not surprising that the
Canadian Department of Finance established a formal
This government action was prompted by the code of conduct several years ago that credit and debit
apparent failure by the payment card networks card industry entities are expected to voluntarily adhere
to establish consistency and transparency with to – and most do. Also, when developing a web presence
regard to enactment of rules and fees. "Businesses or communicating directly in Canada, it is important to
keep in mind that Canada is officially a bi-lingual country,
have voiced real concerns about the lack of choice recognizing both French and English. In certain provinces
they have had in accepting debit and credit card both languages are commonly spoken.
payments, and about the costs involved," said Jim
Flaherty, Minister of Finance at the time the code When entering Canada or any other market, there is a
was published. "The Code of Conduct encourages natural learning curve U.S. companies should not rush.
Joe Kaplan, Chief Executive Officer of Total Merchant
choice and competition." Services, said TMS recently had success entering the
Canadian market and plans to expand into other markets
Following is a summary of Canada's code of conduct in the future. "The complexities for us were just building
provisions. the back-end systems, the front-end systems, the reporting
systems, everything that allows us to support a sales
• Card network rates and fees must be partner and merchant," he said. "We had to work with a
fully disclosed in acquirer agreements, on processor. We had to talk to banks. We had to understand
statements and online. how to get there to build the infrastructure." All of this
preceded hiring an on-site sales force.
• Minimum 90-days notice must be
given to merchants related to any fee Prior to building their Canadian infrastructure, TMS
increase or new fee. representatives met with merchants in different provinces
to learn about the marketplace and discuss the challenges
• Within 90 days of said notice they were facing. Taking into account information gleaned
merchants must have the option to in the field and combining that with extensive outside
cancel contracts without penalty. market research, TMS was then prepared to advance.
• Payment card networks cannot require "While you're creating the infrastructure, you're also
merchants to use credit and debit card starting to simultaneously build out what you think you
payments from the same network. can add to the edge competitively, where you can create
some sort of durable advantage or solve some big need,
• Merchants may ofer discounts for which will allow you to be more successful," Kaplan said.
diferent payment methods, provided
they're posted at the POS. Part of the durable advantage in Canada will likely stem
from technology, which is well ingrained in the culture
• Competing domestic apps cannot there. "Canadians as a whole are extremely technology
appear on the same debit card, but literate, and they embrace and adopt technology very
noncompeting apps can. quickly," Gokturk said. "We're one of the most connected
nations in the world. When Square came to Canada, there
was a run on Square because it was an early technology
tool, and people wanted to use and embrace it to create
value for themselves."
40
Code of conduct for Canadian payments • Equal branding visibility is required
on all co-branded debit cards. Debit
In April 2010, Canada's Minister of Finance and credit card functions shall not both
introduced a voluntary Code of Conduct for the reside on the same payment card.
Credit and Debit Card Industry in Canada. The • Premium payment cards with higher
document's purpose is to promote fair business interchange fees must meet income and
practices and transparency connected with payment consent thresholds.
card costs and benefts borne by merchants and
consumers. Canadian legislators concurrently • Merchants who have not consented
enacted the Payment Card Networks Act, which to use new card brand products and
granted Canada's Minister of Finance authority services are not obligated to use them.
to further regulate market conduct if deemed
necessary. With trust so highly prized, it is not surprising that the
Canadian Department of Finance established a formal
This government action was prompted by the code of conduct several years ago that credit and debit
apparent failure by the payment card networks card industry entities are expected to voluntarily adhere
to establish consistency and transparency with to – and most do. Also, when developing a web presence
regard to enactment of rules and fees. "Businesses or communicating directly in Canada, it is important to
keep in mind that Canada is officially a bi-lingual country,
have voiced real concerns about the lack of choice recognizing both French and English. In certain provinces
they have had in accepting debit and credit card both languages are commonly spoken.
payments, and about the costs involved," said Jim
Flaherty, Minister of Finance at the time the code When entering Canada or any other market, there is a
was published. "The Code of Conduct encourages natural learning curve U.S. companies should not rush.
Joe Kaplan, Chief Executive Officer of Total Merchant
choice and competition." Services, said TMS recently had success entering the
Canadian market and plans to expand into other markets
Following is a summary of Canada's code of conduct in the future. "The complexities for us were just building
provisions. the back-end systems, the front-end systems, the reporting
systems, everything that allows us to support a sales
• Card network rates and fees must be partner and merchant," he said. "We had to work with a
fully disclosed in acquirer agreements, on processor. We had to talk to banks. We had to understand
statements and online. how to get there to build the infrastructure." All of this
preceded hiring an on-site sales force.
• Minimum 90-days notice must be
given to merchants related to any fee Prior to building their Canadian infrastructure, TMS
increase or new fee. representatives met with merchants in different provinces
to learn about the marketplace and discuss the challenges
• Within 90 days of said notice they were facing. Taking into account information gleaned
merchants must have the option to in the field and combining that with extensive outside
cancel contracts without penalty. market research, TMS was then prepared to advance.
• Payment card networks cannot require "While you're creating the infrastructure, you're also
merchants to use credit and debit card starting to simultaneously build out what you think you
payments from the same network. can add to the edge competitively, where you can create
some sort of durable advantage or solve some big need,
• Merchants may ofer discounts for which will allow you to be more successful," Kaplan said.
diferent payment methods, provided
they're posted at the POS. Part of the durable advantage in Canada will likely stem
from technology, which is well ingrained in the culture
• Competing domestic apps cannot there. "Canadians as a whole are extremely technology
appear on the same debit card, but literate, and they embrace and adopt technology very
noncompeting apps can. quickly," Gokturk said. "We're one of the most connected
nations in the world. When Square came to Canada, there
was a run on Square because it was an early technology
tool, and people wanted to use and embrace it to create
value for themselves."
40
